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American Petroleum Institute sues EPA over biodiesel

In alphabet soup terminology, the API's mad at the EPA, and the RFA thinks it's a bunch of BS.

Let us explain. The American Petroleum Institute, in response to the Environmental Protection Agency's ratcheting up US biodiesel production mandates, has sued the EPA, calling the regulator's new rules "overzealous" and "unworkable." The EPA is mandating the production of 1.28 billion gallons of biodiesel next year, up from 1 billion this year.

The API, which filed its lawsuit in the US Court of Appeals for Washington DC, added that the new mandate will create costs that are $425 million more than the benefits. The API also brought up three biodiesel companies that the EPA busted for submitting invalid renewable fuel credits.

The EPA in September approved the 28-percent increase in mandated production of biodiesel, which represents biofuels made from biomass sources such as vegetable oils and waste oils from renewable sources. The EPA had boosted the mandate this year by 25 percent to 1 billion gallons.

Meanwhile, the Renewable Fuels Association, an advocacy group for biofuels, says the lawsuit is a smokescreen for concerns over a potential drop in demand for petroleum. The RFA, in a statement Tuesday, called the lawsuit a "dog bites man" scenario. Read the API's press release below.

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API files suit against EPA's unworkable 2013 biodiesel mandate

WASHINGTON, November 27, 2012 – The American Petroleum Institute (API) filed a lawsuit in the U.S. Court of Appeals for the District of Columbia late Monday against the Environmental Protection Agency (EPA) for its decision to mandate the use of 1.28 billion gallons of biodiesel in 2013, a 28 percent increase from the 2012 requirement. API also filed a petition for administrative reconsideration of the 2013 biodiesel mandate with EPA.

"EPA's overzealous 2013 biodiesel mandate is unworkable, could raise the costs of making diesel fuel, and should be reduced," said Bob Greco, API group downstream director. "In its final rule, EPA admitted the costs of increasing the biodiesel volume requirement for 2013 outweighed the benefits by as much as $425 million. Furthermore, fraudulent biofuel credits that have plagued the system since last year and have yet to be resolved could inhibit industry's ability to meet EPA's higher biodiesel mandate."

EPA has uncovered more than 140 million invalid renewable fuel credits, known as RINs, generated by three biodiesel companies, representing between 5 and 12 percent of the biodiesel market.

"The fraudulent RIN problem is having, and will continue to have, significant impacts on the biodiesel marketplace that make it more difficult for companies to comply with EPA's mandate," Greco said.

API is a national trade association that represents all segments of America's technology-driven oil and natural gas industry. Its more than 500 members – including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms – provide most of the nation's energy. The industry also supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers $86 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

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@Marcopolo There's already ports that allow only diesel at port (I know CARB regulates this statewide in California). There's a move to even turn off fuel burning engines and use batteries. It shouldn't be too difficult to push that nationwide. If on the other hand, you wanted to disallow use of bunker fuel completely, it'll be a bigger challenge. In terms of GHG emissions impact it's not that huge (international shipping makes up only ~3%, light duty vehicles make up ~20%).

API sez: "It's too hard..." We say: "Oh yes, please do continue to dump your pollution into the air we all breathe, and it is just *fine* for you to chemically alter the most important balance in the climate that all life depends on... Oh, and it's great that you have been earning the biggest profits in the history of capitalism! " [/tongue in cheek] Because oil companies are able to externalize their biggest costs, we certainly can't let them tell us what to do. Neil

Hmmmmm, although most people are cool on biodiesel here, I am betting that since the farm lobby is less evil than the oil lobby, people will be mad at the oil people for suing....although, I admit people here could surprise me.

I am critical of any bio-fuel that requires cultivation of land. Make anything you want from waste materials, pond algae, but once you start cutting down trees, plowing, planting, fertilizing, dumping pesticides in, then I think you need to make an extremely strong case why this should be done. That case should start with a viable civilization sustaining EROI (>4:1). I don't believe Corn Ethanol, nor Biodiesel crops meet that and as such they are more about shuffling deck chairs, than being a real solution.

I don't like industries twisting the arm of government to steal more money from me. When they take that money and use it to sue other industries who have stolen money from me, well that's particularly rage inducing. Keep government out of business and business out of government.. the effects are never good.

I am fine with biodiesel, I just don't think that making it from soybeans is efficient enough to replace a sizable portion of fossil fuel use. Also creating fuel from plants is such an energy intensive process that it seems like a waste to dump the fuel in an engine that only uses 25% of the energy content. But you are right, if the fossil fuel companies follow through on their business plan they will destroy human civilization(along with many species of plants and animals).

You are in luck. The EROI for Vermont Sunflower seed biodiesel is as high as 5:1 on some farms, with the hopes of reaching an EROI of 8:1. This aren't theoretical studies done by bean counters in a cubical in New Jersey. These are actual results from actual biodiesel production. http://www.vsjf.org/assets/files/VBI/Oilseeds/VSJF_EROI_Report_Final.pdf This is better than the EROI for Shale Oil, which is approx 5:1. The US would be better off not building the Keystone Pipeline to import more foreign oil (sending our money outside of the US) and instead invest right here in Vermont, USA expanding and copying the farms with the best EROI numbers.

Actually - that isn't a bad idea. Vehicles have run on used vegetable oil here and there, and the stuff taken from McDonalds has exhaust that smells like french fries. I am not exactly sure of how clean this is overall, but since the stuff is out there, and doesn't need to be 'new' oil, this could be a solution (I say 'could be' because i have no clue on how expensive it is to gather up, transport, filter 'bits' out, etc.). I am sure McDonalds would be happy, as they could point out how 'green' and wonderful they are, and, if a bus drives by and then everyone wants french fries, that is a two-fer for McDonalds. Also, there are like 40,000 McD's world wide, so it isn't like they are all concentrated in a small area. Anywhere where there is a bio diesel facility - anywhere - there are likely to be a bunch of McD's nearby. AND MAYBE THAT IS WHY HE WAS SCREAMING WITH ALL CAPS BECAUSE IT IS SUCH A COOL TASTY IDEA!

So you found a dubious study (it reads more like a student report). Consensus puts the biodiesel numbers closer to 1 in the US growing conditions regardless of feed stocks. If they were really doing 5-8 EROI, they would be making lots of profit and growing fast without any help.

@ Neil Blanchard Neil, here's the problem. We all appreciate the future problems with oil depletion, etc. But government have to be responsible and realistic. Inflammatory statements like " biggest profits in the history of capitalism ", make good rhetoric, but aren't really accurate or true. Oil companies make moderate profits against invested capital. Oil companies make far less percentage of profit against less capital intensive industries. (Apple, Microsoft and IT/IP companies are for more profitable). Without the oil industry, the US government couldn't function, and the US would slide into the worst depression in it's history. (taking with it the rest of the world). The position of Oil industry in the economy is very entrenched. All those DOE loans, are partly funded by America's biggest taxpayer. It's no good just hating, you got to have practical, economic solutions. The use of ethanol is an uneconomic handout to the farm lobby. I have no objection to inventing an industry just to help small towns in regional Americas, but less recognize it for what it is, an inefficient farm lobby industry. You want to clean-up air pollution ? Tell your Congressman, Senator, President to stop allowing shipping rigged for bunker oil fuel visiting US ports. Stopping just one of the 60,000 ships that visit US ports each year, would do more to reduce air pollution, than the entire ethanol industry ! It's not a matter of goodies and badies, but priorities !

If you want to understand this lawsuit, all you have to do is look at who has the power in the American Petroleum Institute. "The Nation" magazine reported back in August, that the API is now led by men like Tofiq Al-Gabsani, a Saudi Arabian national who heads a Saudi Arabian Oil Company (Aramco) subsidiary, the state-run oil company that also helps finance the American Petroleum Institute. Al-Gabsani is also aregistered foreign agent for the Saudi government. This is just Saudi Arabia trying to extend OPEC's monopolistic policies via the US Courts. The only real question is why so many Americans are willing to turn a blind eye to OPEC and the Saudi dictatorship using our own courts against US produced energy. http://www.thenation.com/blog/171529/saudi-led-oil-lobby-group-financed-2012-dark-money-attack-ads# http://www.thenation.com/article/169639/never-mind-super-pacs-how-big-business-buying-election

This is a very American law suit . It's a contest between emotion and economic logic. The 'Vested Interests' on both sides of the issue will be categorized by popular prejudice, and probably only the judge will be listening to the facts. The usual collection of conspiracy, anti-capitalists, anti-big company, anti-oil will post irrelevant comments, to the cheers of their followers. They will vilify and attack perceived enemies with little regard for facts or relevance. Not unexpectedly, the Ethanol lobby will defend it's position with a combination of ideology and farm political clout. Otoh, the API lawyers, and anti-government subsidy advocates, will attempt to demonstrate that the ethanol lobby are a bunch of corrupt feather bedding weasels, ripping off the US taxpayer. The misconduct cited (even 140 million times) is as irrelevant as oil spills etc. In all this legal and emotional hyperbole, the real issues will become confused and forgotten. In my opinion, the real issues are fairly simple and straightforward. Is the US prepared to continue to mandate and subsidize the use of an uneconomic product, that has no real potential to expand it's very limited environmental benefits. The US is no longer in the financial position to support failed idea's, no matter how well intended. If the purpose of mandated (or compulsory) ethanol is to continue, the reasons should be clearly stated. The truth is unpalatable, the ethanol industry exists because of political, not economic, expediency. To abandon the government support for this inefficient industry would be devastating to those whose incomes depend on ethanol production, and however irrational, bring down the wrath of the emotional 'green' lobby' on supporting politicians. I feel sorry for the unfortunate Judge !

The place that I get my Biodiesel from has a high enough EROI to continue making profit after they stopped getting the blender credit. Peter, last year, when the $1/gal blender credit went away... most of the biodiesel suppliers stopped selling biodiesel to the public. This made it hard to find. I have to go out of my way to fill up some drums and store it for my fillups. It can be economical, but just barely sometimes. I get B80 for about 10c per gallon cheaper than dinodiesel. No, not soy, but a mix of animal fat waste and a few non-food crops.